Tata Motors – DVR

Technicals on Weekly Chart :

Huge Negative Divergence b/w the stock price and RSI on weekly chart –

On hitting an ATH of 1063 in March the stock was at 92 RSI, but even hitting a new ATH of 1185 the stock was at a much much lower RSI of 64.

Fundamentals –

BEVs on the Backfoot? Surge of CNG and Hybrid Alternatives.

Volume growth in H1 2024:

• CNGs – 59%
• BEVs – 10%
• HEVs – 30%

• Growth in CNGs was largely driven by new products like Tata Punch with dual-CNG tank, and Maruti Fronx, both launched in H2-2023. The rest of the growth came from higher sales of Maruti products: Ertiga (+19%), Dzire (+12%) and Brezza (+10%).

• Demand for EVs in India fell to a 19-month low of 5,733 units in September 2024.
• The average car sales price for BEVs is ₹ 14.1 lakhs, and for HEVs it is ₹ 25.6 lakhs, with present sales gap of a mere 1%.
• 52,415 BEVs and 51,832 HEVs were sold in H1 2024.

Post-pandemic shift from Hatchbacks to SUVs/MUVs.

• Hatchbacks losing market share to SUVs/MUVs dominated by Mahindra and Toyota.
• Only three Hatchbacks out of top 15 selling cars in September sales fig. This trend can be observed for the past few months.

• Post H1 2024, sales fig. for Tata Motors have taken a further hit.
• Facing the most YOY and the most MOM degrowth among all the Hatchback manufacturers.

• Mahindra with its SUV-heavy portfolio has taken over Tata Motors September sales fig. and is behind Hyundai with a mere 40 units gap.

We're all aware that there is a shift towards SUVs/MUVs by the aspiring Middle class, for the better looks and superior feeling of ownership. But what about the shift from EVs?

India mirroring the trend in global EV sales.

• Europe which saw BEVs record their largest YoY decline since January 2017 – of 36 percent in August – demand for EVs in India fell to a 19-month low of 5,733 units in September 2024.

• Demand rose consistently and hit a high of 9,661 units in the month of March 2024. However, since then, as per retail sales data from the Vahan website, monthly numbers have gone down, dropping to 6,630 units (down 5 percent YoY) in August and now 5,733 units in September.

All in all, Tata Motors is losing from all ends.

Disc- No rec. of buy or sell. Sold off holding from family portfolio @ 980-1000.